So, Spain cuts government jobs and wages--actual spending on government. The unemployment rate goes up, triggering an increase in interest rates.------------------------------------------------------------------------You are not paying attention. They HAVE NOT cut government jobs and wages.

Unless you count:"Raising retirement age according to life expectancy starting in 2020"and"No Christmas bonus for pensioners earning over $3800/mo

Interest rates are high because people don't want to loan them money because they have not made any significant cuts.

You act as if they had full employment and a budget surplus and then they just started slashing government and it all fell apart. Ridiculous. They absolutely have not made significant cuts (which is clear if you take time to look at the 'austerity measures' actually implemented)

Feel free to provide evidence of the 'deep cuts' in government that you think started this vicious cycle

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